The undersigned civil rights, consumer, labor, faith, veterans, seniors, and community organizations, strongly urge you to oppose H.R. 4018, the “Consumer Protection and Choice Act.” This harmful bill would limit the Consumer Financial Protection Bureau’s (CFPB) ability to protect all consumers against high-cost payday, car title, and installment loans. In addition to delaying the Bureau’s rule-making for two years or longer, H.R. 4018 would allow the payday industry to avoid federal regulation altogether by pushing an industry-backed proposal based on a Florida law1 that has proven ineffective at stopping the payday loan debt trap.

In 2016, the CFPB is expected to release important new rules that will help protect borrowers from abusive small dollar lending. The CFPB’s rule will require payday lenders to follow the example of other commercial lenders in implementing a number of critical, common sense safeguards that enjoy broad public support2—including a requirement that lenders fully consider a borrower’s ability to repay a loan without taking out a new loan or deferring other necessary living expenses.

More than 5003 civil rights leaders, women’s groups, affordable housing providers, faithbased organizations and consumer rights groups from nearly every state in the country, as well as over 100 Senators4 and House members5 support the CFPB’s effort to protect consumers from abusive payday lender practices.

Additionally, H.R. 4018 would allow abusive small-dollar lenders to go on doing business as usual if states enact laws similar to a Florida law, putting in place so-called ‘industry best practices.’ Instead of protecting consumers, H.R. 4018 and the industrybacked Florida law would do more harm to consumers by putting a stamp of approval on:

Triple digit interest rates: Under Florida law, the typical payday loan costs about 300% annualized interest (APR)—an exorbitant rate of interest that wreaks havoc on households who are already struggling financially, and was illegal in all states until relatively recently;

Back-to-back lending without considering borrowers’ ability to repay - Rollover bans and cooling off periods are insufficient to protect borrowers from long-term financial harm. In spite of the industry-backed Florida law, 88% of repeat loans were made before the borrower’s next paycheck;

A long-term cycle of debt - Limiting borrowers to one loan at a time has failed to provide relief in Florida, where 85% of payday loans are issued to borrowers with seven or more loans per year; and

$280 million in fees drained from lower-income Floridians per year as a result of repeat lending at abusive rates and $3.6 billion in fees drained annually from consumers across the country.

As a result of these shortcomings, Florida civil rights consumer advocacy, faith, and asset building groups across the state6 have voiced their strong opposition to the adoption of the Florida law as a template for the CFPB or any other state to follow.

H.R. 4018 is not an effort to reform the payday loan market—it is an attempt to codify industry-backed practices that do little to protect consumers. Low-income consumers deserve strong protections and timely action.

The CFPB must be allowed to consider every possible way to stop the payday debt trap and take much-needed steps to protect consumers from abusive lending. We urge you to oppose H.R. 4018 and any other effort to block meaningful consumer protections for borrowers targeted by abusive payday, auto title, installment and other high-cost small dollar lenders.

Sincerely,

National Groups

Alliance for a Just Society

Allied Progress

Americans for Financial Reform

Center for Responsible Lending

Consumer Action

Consumer Federation of America

Consumers for Auto Reliability and Safety

Consumers Union

Corporation for Enterprise Development

Goodwill Industries International

MyPath

NAACP

National Association of Consumer Advocates

National Consumer Law Center (on behalf of its low income clients)

National Council of La Raza

National People's Action

NETWORK, A National Catholic Social Justice Lobby

PICO National Network

Policy and Economic Research Council

U.S. PIRG

State & Local Groups

A Paul Kurkjian A Medic C (CA)

Action Advocacy (CT)

Action NC (NC)

Affordable Homeownership Foundation Inc. (FL)

Alabama Appleseed (AL)

Alabama Arise (AL)

Arizona Community Action Association (AZ)

Arkansans Against Abusive Payday Lending (AR)

Brazos Valley Affordable Housing Corp. (TX)

Brighton Park Neighborhood Council (IL)

Bucks County Women's Advocacy Coalition (PA)

California Reinvestment Coalition (CRC) (CA)

CASA of Oregon (OR)

Catalyst Miami (FL)

Center for Economic Integrity - New Mexico Office (NM)

Center for Economic Progress (IL)

Center for Financial and Human Dignity (NC)

Center for Housing and Community Studies (NC)

Center for Transforming Lives (TX)

Central New York Citizens In Action, Inc. (NY)

CFORM/Covenant Community Development Corporation (MS)

Christian Community Service Center (TX)

Christian Life Commission (TX)

Citizen Action (IL)

Citizen Potawatomi Communty Development Corporation (OK)

CitySquare (TX)

Coalition for a Prosperous Mississippi (MS)

Coalition on Homelessness & Housing in Ohio (OH)

Colorado People's Alliance (CO)

Communities in Schools Western Nevada (NV)

Community Development Corporation of Marlboro County (SC)

Community Economic Development Association of Michigan (MI)

Community Financial, Inc. (AK)

Community Legal Services in East Palo Alto (CA)

Connecticut Association for Human Services (CT)

Connecticut Legal Services, Inc. (CT)

Consumer Council of Mo. (MO)

Consumer Credit Counseling Service of Forsyth County (NC)

Consumer Federation of California (CA)

Consumers Council of Missouri (MO)

Credit Counseling Agencies of NC (NC)

DCRAC (DE)

Delaware Community Reinvestment (DE)

East LA Community Corporation (CA)

Empower Missouri (MO)

Empowering and Strengthening Ohio's People (OH)

Ensuring Opportunity Campaign to End Poverty in Contra Costa (CA)

Erie Benedictines for Peace (PA)

Express Advantage (WA)

Fair & Just for All (CA)

Faith Voices for Jefferson City (MO)

Fig Loans LLC (TX)

Financial Pathways of the Piedmont (NC)

First Baptist Church, San Marcos (TX)

Florida Alliance for Consumer Protection (FL)

Florida Prosperity Partnership (FL)

Foundation Communities (TX)

Four Bands Community Fund, Inc. (SD)

Fund 17 (LA)

Funeral Consumers of Tampa Bay (FL)

Georgia Rural Urban Summit (GA)

Georgia Watch (GA)

Global Green (MI)

Good Work (NC)

Gowen Consulting (AL)

Greater Wards Corner Area Business Association (VA)

Greensboro Housing Coalition (NC)

GRO -- Grass Roots Organizing (MO)

Habitat for Humanity of North Carolina (NC)

Harlingen Community Development Corp. (TX)

Haven Neighborhood Services (CA)

Hawaii Alliance for Community Based Economic Development (HI)

Helping Hands Ministry of Belton (TX)

Housing Alliance of Pennsylvania (PA)

Housing Research & Advocacy Center

Housing Research & Advocacy Center (OH)

Idaho Community Action Network (ID)

Illinois Asset Building Group (IL)

Indiana Assets & Opportunity Network (IN)

Indiana Association for Community Economic Development (IN)

Innovative Changes (OR)

InSight Fund (NC)

Iowa Citizens for Community Improvement (IA)

Jacksonville Area Legal Aid, Inc. (FL)

Jesuit Social Research Institute (LA)

Kentucky Equal Justice Center (KY)

Kingdom Community Development Corp. (NC)

Land of the Sky UCC (NC)

Law Foundation of Silicon Valley (CA)

Legal Aid Justice Center (VA)

Legal Assistance Resource Center of Connecticut, Inc. (CT)

Louisiana Community Reinvestment Coalition (LA)

Lubbock Housing Finance Corporation

Maine Center for Economic Policy (ME)

Maine People's Alliance (ME)

Mary's House Catholic Worker (AL)

Maryland CASH Campaign (MD)

Maryland Center on Economic Policy (MD)

Maryland Consumer Rights Coalition (MD)

Metropolitan Milwaukee Fair Housing Council (MI)

Metropolitan St. Louis Equal Housing and Opportunity Council (MO)

Midland College Business and Economic Development Center (TX)

Mission Asset Fund (CA)

Mississippi Center for Justice (MS)

Missouri Faith Voices (MO)

MLK Sr Community Resources Collaborative (GA)

MOAA NC Council of Chapters (NC)

Monsignor John Egan Campaign for Payday Loan Reform (IL)

Montana Organizing Project, a project of Alliance for a Just Society (MT)